Florida mortgage fraud boss pleads to Ohio scheme

Shannon Behnken The Tampa Tribune

Published: September 23, 2011

Updated: March 20, 2013 at 11:56 PM

TAMPA -
A year after his $6.9 million-mortgage fraud scheme was uncovered in a 2006Tampa Tribune investigative story, Chad Evans was under pressure, amid a federal government investigation.
So he left town, taking his money-making, house-flipping scheme back home to Cincinnati. There, according to the plea agreement he signed last week, Evans created a new company and continued to defraud federal institutions.
Evans pleaded guilty to mortgage fraud in Florida late last year. He was scheduled to be sentenced in that case last week, but that was postponed because of the Ohio case. Evans is now scheduled to be sentenced in Tampa on charges in both states in November.
Evans' lawyer did not return a call for comment.

Evans and co-defendant Chris Malcom ran Clearwater companies, Shorefront Ventures LLC and Tye Funding LLC. The pair worked with professionals to lure straw buyers to participate in 50 fraudulent mortgage transactions, according to the court documents.
A straw buyer is someone who buys property on another's behalf. In this case, straw buyers also broke federal laws by lying to federally-backed financial institutions, according to the government.
The scheme was originally uncovered in a Tampa Tribune investigative story five years ago.The charges carry a maximum sentence of 30 years imprisonment and a fine of $27,496.
The core of the scheme, according to the government, involved inflating home prices and diverting the "equity" back to Malcom and Evan's companies. The companies provided straw buyers with down payments and located homes to purchase. They used proceeds from inflated sales to provide down payments.
In Cincinnati, Evans created a new company, TC Funding Group. From October 2007 to May 2008, Evans used similar methods in the Cincinnati area, according to the United States Attorney's Office in the Southern District of Ohio.
He purchased low-value properties and arranged for the resale to buyers he recruited "on the representation that the real estate had or would receive substantial renovations and improvements," according to the government.
Evans provided the funds for the buyer's down payment without the bank's knowledge and provided false information on loan applications to Fifth Third Bank and Wells Fargo Bank.
Evans then received "large sums from the resale to the buyers through the payoff of construction loans on the properties."
The federal government has not released details of the case, including the number of properties involved in Ohio and the loss amount for lenders involved. However, the government charges Evans made at least $900,000 from the scheme, according to public records.
The Tribune's original investigation revealed Evans and Malcom used the same real estate agent, Dawn Molen, to represent their deals.
In a deal outlined in the newspaper story, one of Molen's buyers presented an offer to buy a home at 1389 40th Ave. N.E. in St. Petersburg for $600,000 -- $70,000 more than the list price. Documents provided to Molen's broker list a $120,000 "payoff" to one of the companies associated with Evans and Malcom.
In two cases, different settlement documents were created: one went to the lender and one was filed with Molen's broker. The difference between the higher price and what the seller received was listed as an "assignment fee," similar to a finder's fee, for the companies in most cases.
Nearly all of Molen's buyers were from Indiana, and many of them told the Tribune they belonged to an investment group led by Evans and Malcom.
Malcom, who also pleaded guilty in Tampa last year, is expected to be sentenced in Tampa in November. He was not charged in the Ohio case.

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